Having been proposed many months ago, the British government has decided to definitely introduce a point of consumption tax for off shore online gaming operators who wish to offer their services to players in the United Kingdom. (See article: Changes to the UK Gambling Act could have a negative effect on online gaming).
A consultation period running from the middle of April to the end of June is now accepting recommendations and suggestions from any groups involved in the online gaming industry to ensure that what is to form the basis of the new legislation is acceptable to all those affected by the new laws.
Online gaming companies licensed offshore in Gibraltar, the Isle of Man and Malta would have to pay an additional tax and many of these such as William Hill (William Hill Casino) and Ladbrokes claim that offshore companies which are licensed and regulated in these locations pose no danger to UK gamblers. The protection of UK gamblers is given as one of the government’s reasons for introducing the point of consumption tax. Whereas some offshore operators claim that the tax will have the opposite effect and due to higher costs will drive UK players to use unlicensed and unregulated online casino sites.
Gibraltar has been granting gambling licences to online casinos, online bookmakers and online betting exchanges since 1998. Its licences are issued by the Office of the Financial and Development Secretary under strict conditions in order to protect the good reputation of its gaming licences. Gibraltar is recognised by the UK Gambling Act of 2005. A number of Gibraltar politicians are completely opposed to the new UK tax and believe it brings into question the integrity of its licences. They do not wish to see the government carry out its plans to tax offshore operators and there is even talk of possible legal action being taken.The British government is giving some justifications for the new point of consumption tax. It wishes to protect British gamblers from unscrupulous offshore online casino operators and also to make the online gaming market more equitable as at the moment offshore online gambling groups pay lower taxes than online operators based in the UK. The government also is hoping to regain some of the revenue it has lost in taxes since most of the large UK gambling groups have moved offshore.